The project sounds great. Your staff is excited. You’re
excited. You’re ready to push the “go” button and get underway. Then your boss
asks that dreaded question: “Do you really think you can pull this off?”

If you’re not quite sure of the answer, now is a great time to undertake a
feasibility study. A feasibility study, in general, is a tool for determining
whether you have what it takes to undertake a change or new project. In
business, most managers make use of a particular feasibility tool called TELOS,
an acronym for the five key areas that you need to consider in your study:

Technological

Economic

Legal

Organizational

Scheduling

The TELOS model was first presented in 2007 by James A. Hall
in his book, "Accounting Information Systems." It’s been adopted across a
huge range of settings since then, because it offers a simple way to consider
the most important issues related to feasibility, whether you’re considering a
multinational pipeline or a small business project.

TELOS Feasibility Study.

When NOT to Conduct a
Feasibility Study

Under most circumstances, a feasibility study is a key step.
But not always. When don’t you need to bother with a feasibility study?

You already know you’re going to move forward with the
project, no matter what the feasibility study says. This happens surprisingly
often, because the emotional lure of a new undertaking, new market, or new
technology may outweigh the reality that the project may fail miserably.

When you already know the project is feasible because it’s
so small, or is so similar to other projects you’ve undertaken, that you
already have the resources, skills, and information you need at your
fingertips.

You already know that the project is NOT feasible, because
it requires an infrastructure, budget, or other resource that is not available
to you at the moment.

You have a general idea (expand into a larger storefront and
hire more staff, for example) but you don’t yet have enough details (location,
costs, staffing needs, etc.) to consider the feasibility of the project.

You could determine the feasibility of the project by making
a few phone calls to determine whether the costs, timeline, or resources
required are outside your organizational scope.

You don’t have the personnel or money to undertake an
effective feasibility study. In most cases, it’s best to hire an outside study
consultant (who is not already emotionally attached to the project concept),
and such consultants don’t usually come cheap.

You don’t have the time to undertake a feasibility before
the project launches.

As you can probably see from this list, a feasibility study
is really only useful if it is thorough, timely, and unbiased. If you really
can’t conduct a study with these qualities, there’s no point in wasting time or
money on a second rate study that is likely to simply tell you what you want to
hear!

What Can a
Feasibility Study Do for You?

Of course, the purpose of a feasibility study is to
determine whether a project is… feasible. In other words, it helps you to
determine what it would take to get the job done well, and it can help you
analyze your ability to meet your standards. But there are more up sides as
well.

The very process of putting your plans into writing is
valuable. It forces you and your team to think through the logistics, planning,
costs, and implementation timetable—and to seriously consider the
implications of your idea. Thus, while you’re establishing the feasibility of a
project, you’re also preparing the ground for putting your idea into action.

As you go through the process of a feasibility study, you’re
also bound to discover opportunities for improving your plans to enhance
marketability, lower costs, manage legal issues, and so forth. This outcome is
very useful, as it smoothes the road ahead and lowers the chances that you’ll
hit a snag right off the bat.

If you are planning to seek funding to support your plan, a
feasibility report is a terrific document for inspiring confidence. "Yes," you
can say, as you meet with your potential funder, “We did conduct a feasibility
study, and here is the report to support our claims that we can complete this
project successfully.”

How to Complete a
Feasibility Study

If you are planning to work with outside counsel, your first
task will be to identify a consulting firm that’s right for the job. Not only
will you be looking for a firm that has experience with feasibility analysis
(and TELOS in particular), but you’ll also want a consultant that knows your
particular industry. That’s because so many people in the consulting world are
specialists: they are right on top of IT, or healthcare, or transportation—but if you’re in the toy business, that’s not a whole lot of help! Yes, general business knowledge is useful,
but there’s a big difference between undertaking a major IT restructuring and
designing, prototyping, manufacturing, distributing, marketing, and selling a
product.

But let’s say, for the sake of this conversation, that you’re
part of a small enterprise with few funds for outsourced consulting needs. You’ve
brought up the idea of undertaking a fascinating new project, and, as a result
of sticking your neck out, you’ve been tasked with the job of studying its
feasibility.

How Do You Start?

First, it’s very important to stay neutral. That may sound like a no-brainer, but it’s amazing how easy it is to interpret questionable numbers or
significant challenges as “hurdles to leap” rather than as “objections to an
otherwise interesting project.” If you
don’t feel you can stay neutral, consider finding a colleague or team mate who
understands the project well but doesn’t have a personal stake in making it
happen. While that person may not do the leg work in collecting and organizing
information, he or she should have an opportunity to review your findings and
analysis to be sure that you haven’t allowed your enthusiasm for the project to
taint your presentation of its likelihood for success.

Now, you’re ready to start on the five-step process of a
TELOS feasibility study. This can be a very large project if you’re considering
a major new enterprise—or a fairly small project if you’re thinking about
making a relatively slight change to the status quo.

T, as You Know, Stands for Technology

The question you’re
really asking here is “Can we build it? And, if we can’t, can we find and pay for the experts who CAN build it?” You’re also going to be considering the related
question: “If it were built, would we know how to use it?”

As an example, imagine that you’re recommending the creation
of a proprietary CMS for your marketing firm. This, you argue, would provide
your team with precisely the tools they need to create the products in which
you specialize. Even better, your in-house team and outsource freelancers would
find it easy to collaborate, and your clients would know just where to find
their work in progress.

Sounds great, but:

Is there someone in-house who could create a CMS?

If not, can you identify a contractor who could do it well?

What would it cost to have a CMS created by a contractor—and how long would it take?

What would it take to train your staff to use the new CMS, and
what would training cost?

Would you need any new hardware or software per workstation
to make the CMS available to staff? What would that cost?

You may not have the answers to all these questions in hand,
and it’s fine to ask for expert advice to provide you with realistic timelines
and numbers.

E Stands for Economics

The questions in this section of the
study might include:

Where is the money coming from to fund this wonderful new
CMS? Is there sufficient money in the budget, or will you need to cut elsewhere or find outside funding?

Will upper management support your project to the degree
that they will make funding available?

Given the costs of this project, is it worth the money relative
to other high priority projects?

Will a proprietary CMS save your company money, and/or
attract new business?

For some types of projects (product development, for
example), it may be worthwhile to prepare a cash-flow analysis to see when a
break-even point will occur, and what kinds of profits are really likely in the
long run. Again, if you are not a financial expert, you may need to find help
for this portion of the process.

L Stands for Legal

At this point you need to ensure that
your project does not break any laws. Obviously you’re not smuggling drugs out
of the country or planning a bank heist, but you may have some issues to
consider relative to, for example, patent or trademark law, international trade
laws, existing contracts, agreements, confidentiality agreements, or more. For
this portion of the project, you’ll probably need to consult with your company’s
lawyer who should have the information you need to make an accurate judgment.

O Stands for Operational

It’s here that projects such
as a new CMS may run into their biggest snags because… there are human beings
involved. And if there’s one thing human beings hate, it’s change. It’s in this
section of the TELOS that you’ll need to ask:

Will we need to institute new procedures to make this new
system successful? What are the
ramifications of that?

What kind of training will people need? What will it cost?

Will we need new staff to, for example, to administer and
troubleshoot this new CMS? If not, are
we relying on our existing IT staff and/or outside consultants? Are there added ongoing costs involved, and,
if so, what are those costs?

Will this project have an operational impact on people
outside of your own team? And, if so, is
everyone else on board with the idea?

S is for Scheduling

Of
course, scheduling relates to the amount of time required to plan, build, train for, and
implement a new CMS. It also relates to the amount of extra time that might be
involved during the actual development and implementation of a time-sensitive
client project. Given a realistic look at the time it will take to make all
this come to pass, and the challenges related to a change of technology for
your team and clients, is it worth it?

Present Your Report and (With Luck!) Move Forward

Once you’ve completed your analysis,
it’s time to write a report. As with any report, the acronym KISS (keep it
simple, stupid!) says it all. Provide a one page executive summary with all of
the major points you’ve covered with your TELOS analysis. Following that,
one-page summary of your findings for each section of the analysis should
cover all your major points. Append your spreadsheets, estimates, and other
materials to your report, knowing that they will be read by very few people.

Before sharing your report, be sure
to share it, first, with your neutral friend who can vet it for any obvious
signs of bias.

If your project is a good one, and
your plans are really supported by your feasibility study, chances are
excellent that you’ll have a new CMS in hand before too long!

For more resources on TELOS and feasibility studies, visit the Iowa State University Extension website, which offers several articles on the definition, process, and usefulness of feasibility studies and TELOS.